(Bloomberg) — A dramatic turnaround in technology stocks has powered a $3.5 trillion increase in the Nasdaq 100’s market capitalization in just four days, driven by strong earnings that have emboldened investors about the AI outlook.
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The tech benchmark has jumped 9.3% over this period, its sharpest rally since April 2025 and the recovery from President Donald Trump’s so-called Liberation Day tariff announcements. It’s a swift snap-back for the index, which slid into a technical correction by falling 11% in a month.
The bounce in the tech sector has been broad, with rallies in semiconductors, software names and the big-spending hyperscalers. Blowout second-quarter results have reassured investors that massive artificial intelligence outlays are not only here to stay, but are already paying off for some of the major players.
Among some of the standout gainers, Sandisk Corp. has surged 41% over the four sessions, Palantir Technologies Inc. jumped 32%, Microsoft Corp. 26%, while Alphabet Inc. and Nvidia Corp. are both up 11%.
“The days where you could short the capex spenders, that is the hyperscalers, and go long the capex receivers are over, and I think that’s a good thing,” said David Rainville, lead manager of Sycomore Sustainable Tech fund. “It’s not a binary trade anymore.”
Last month’s heavy deleveraging, which drove the correction in technology stocks, means that fast-money actors like hedge funds have covered a lot of their short positions. They are now back to buying the sector.
According to Goldman Sachs Group Inc. Prime Brokerage data, hedge funds added information technology sector stocks at the fastest pace since December 2022 last week. The Magnificent Seven were collectively purchased, but overall exposure is still subdued, leaving scope to build positions further, the team said.
Technology stocks have delivered earnings beats 90% of the time against a high bar in this reporting season, according to a Bloomberg Intelligence tracker, while analysts have kept raising their estimates.
Still, the latest earnings cycle has served up striking divergence among technology leaders, with investors rewarding companies showing tangible AI revenue, while penalizing those with less visible payoffs.
